In an equity offering, primary shares, in contrast to secondary shares, refer to ''newly issued'' shares of

common stock Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Comm ...

. Proceeds from the sale of primary shares go to the

issuer Issuer is a legal entity that develops, registers, and sells securities for the purpose of financing its operations. Issuers may be governments, corporations, or investment trusts. Issuers are legally responsible for the obligations of the issu ...

, while those from preexisting secondary shares go to

shareholders A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal ow ...

. Most

initial public offerings An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...

(IPOs) have a mix of both primary and secondary shares.

References

Corporate finance Stock market {{Stockexchange-stub